tv The Kudlow Report CNBC December 9, 2013 7:00pm-8:01pm EST
i like to say there's always a bull market somewhere, and i promise to try to find it just for you right here on "mad money." i'm jim cramer and i'll see you tomorrow. it's another day of bad surprises from obama care. and this may be the topper. some people with pre-existing conditions, especially cancer patients, may be worse off because of the new law. and sticker shock. deductibles are skyrocketing and that means huge out-of-pocket posts. and then get this -- 70% of doctors in california won't play in obama care. also tonight, very senior, highly placed republican house source in washington, d.c. tells me the budget deal is close but the sequester will not survive intact and there will be a
revenue package. and finally, the fight for economic freedom gets even more intense overseas. look at this statue of linen toppled. this fight is not going away. all those stories and much more coming up on "the kudlow report" beginning right now. i'm larry kudlow. this is "the kudlow report." first up tonight, a report that a majority of california doctors, as many as 70%, are staying off the state's obama care exchange because they can't afford to participate. that simple. and obama care, listen to this, it's offering medicaid reimbursement rates.
look, around the country a medicare pays $76 for a return patient visit. that's medicare around the country. in california, these medicaid rates would mean $24 for a visit. would you practice medicine with those kinds of numbers? here now to discuss is democratic strategist chris kofin kofinis, mike slater out of san diego, california, where we all wish we would be. mike slater, let me go to you first. the way california is doing this, they're treating doctors like medicaid surfs. so therefore, no pay, no play. that's simple enough for me. is that the story? >> so glad you used that word. doctors are treated like servants and not like traders of services.
i come to you from inside the crystal ball and every doctor i've talked to in california says this is a disaster for patients and for them. everyone was so focused on health insurance, no one ever asked doctors what they think is best. which is so weird because they're the once administering the health care. so we have this situation where maybe more people have health insurance than ever before but what good is health insurance if it's nearly impossible to access health care. >> and chris kofinis, they kept sending -- the health care authorities in california kept sending out letters to the doctors. and the doctors and their associations, their representatives, would send the letter back saying, what are the rates? and they wouldn't tell them the rates when finally we figured out what the reimbursement rates are. then 70%, 75% of the doctors say, no way, i'll retire, go into real estate, buy the padres, whatever. but they're not doing medicine anymore. chris, you can't get away with
that stuff, paying $24 for a visit. that's insanity. >> remember that part of the objective here was to not only bend the cost curve but to bring costs down. i don't know what the eventual reimbursements will be. these are adjustments that are made to attract more doctors into the practice. but the reality is -- i was in california over the holidays. and i had conversation with family members who are doctors. i asked them point-blank. to them, they don't see obama care as the negative that others see it. i was actually surprised. i thought they would be more critical and they weren't. they think it's going to be a net positive. i guess that's going to be disputes amongst different doctors. but the goal is to bring costs down. it's hard for people to accept but this is clearly an important part of health care reform. >> scott gottlieb, seems to me
the goal may be to bring costs down. i don't think this is the right way to do it. but they're bringing doctors down. that's what they're doing. i'll just ask you. you're in the profession. how the hell do you have a doctor run a practice with a $24 visit? >> right. >> $24 visit. i don't know enough about it -- none of my doctors charge $24. i wish they would. but then again i don't wish they would because if they did, they wouldn't be able to practice and i wouldn't have good doctors. >> this isn't just california but nationwise. only certain providers have a cost structure in their office where they can turn a profit or even stay in business by providing services at those services and they tend to be medicaid providers. they're extending the medicaid program. these medicaid providers now are going to be treating a larger
medicaid population at the same time we're asking them to also treat the patients being put into obama care. it's not going to work. there's going to be a relative shortage insofar as -- >> you have price controls. you're going to get shortages. >> this whole darn thing, medicaid is the big winner, look at the enrollment and the recruitme recruitme recruitment. medicaid is a big, giant step towards single payer, government-run health care, period, end of sentence. let me move on to another important obama care headline today. this is courtesy of dr. scott gottlieb. in the "new york post," you write about making good on obama's "keep your insurance" promise by allowing americans to shop inside the federal employees' own health business plan. i'm a former federal bureaucrat. scott, is this feasible? what are the advantages of the
federal employees' health care plan? >> it's a true marketplace. you have all different kinds of plans being sold and people can actually choose the plan that they want and tailor what they want to receive. the amazing thing is that the plans are actually cheaper than the obama care plans even without the federal subsidies. if you take the list price of a plan in that system and try to compare it to a comparable obama care in the same market, you'll see that there are cheaper options in the federal plan. my argument is this, people who lost their insurance, who were kicked off their insurance, rather than forcing them into obama care, let them shop in the federal program. let them have access to a real marketplace. >> chris, thousands of plans are in this federal employees' health care plan. it's whatever consumers want, the insurers are going to provide it.
it's not just like four basic plan, one size fits all. this is competition. why can federal workers have this and not the rest of the people around the country? the other 300 million of us? >> well, inside to be -- i was a former federal employee and i was in that health care plan. and it's a very good health care option. no question about that. i don't see that necessarily as negative to open it up. my perspective is, in terms of the issue of allowing individuals to keep their health care insurance, that stays in place for a year. there are obviously alternatives and people can see in the exchange if they can find better plans or not. but if the republicans or someone wants to propose this as an option, they should do it. there's clearly going to be fixes -- it happens with every major piece of legislation. if this passes the feasibility test, let's do it. >> scott, is there any way -- it is late in the game.
only a couple of weeks. is there any way to open the door to that option of the federal employees health care plan with its thousands of choices? that's the part that i find so impressive. choice, free choice for health care. >> right. and not just choice but choice in the benefits. obama care, if you try to buy up your benefit in obama care, if you go from the bronze plan to the platinum plan, you're not getting a different network in many cases and you're not getting a different drug formula. you're just getting lower co-pays and lower deductibles. in the federal program, you have a real choice. that gives you lower cost options. to get to your question, could they do this now? it would be very hard. it's very late in the game. if they wanted to do something like this, they could get it in place in a couple of months but it wouldn't be ready for january 1st. >> i'm afraid you're right. mike slater, to you, in some sense the biggest headline today, the lead story in "the
wall street journal," one of the lead stories in "the new york times" is sticker shock. this time, it's sticker shock for out-of-pocket costs from deductibles, high deductible plans. that's the sticker shock. people are focusing on the premiums. but actually they're going to have to pay a lot more because the deductibles are going to be a lot more. and this thing has of course health care content. people are going to get damaged, lose their doctors, lose their great hospital services but also it's politics. as this comes out and the sticker shot not just the premiums but the deductibility and what people are going to have to pay out of -- this is a huge factor, mike laslater. what are the geniuses now from the white house? why haven't they figured this one out? >> and you're looking at 30% co-payments even after you meet the deductible as well. and one thing about covered california, our health exchange here, the website is still totally messed up. they're giving you premiums which are still inrat according to every health insurance
adviser i've contact to. one thing, the purpose of obama care was to bridge the divide between the haves and the have nots with health care. but people in obama care, they can't go to the best hospitals. they're not going to be able to see as many doctors as they want. and they're going to see rationed care and longer lines. but zeke emanuel admitted if you're willing to pay more, you can get broader options, you can maybe go abroad and have medicine around the world. the purpose was to bridge the gap. and obama care only makes it even wider. as you mentioned, larry, with the co-pays going up, it's even worse -- >> we're going to play that zeke emanuel tape in a few minutes. chris kofinis, because i admire and respect you and i have so much affection for you, i want to give you a little piece of free political advice. get this guy zeke emanuel off the air. >> absolutely! >> this guy -- he's been on this
show. either he lied or he was just ignorant. the guy is supposed to be a smart guy. teaches school at the university of pennsylvania. get him out of there because every time he shows up and makes the statements that he makes, this is like the democratic party dying of 1,000 cuts. chris, can you write that in, get into that the political operation of the white house? put zeke emanuel on retirement? >> yeah, i'm going to probably have to deflect that question -- >> oh, i know. >> but let me address the comment that was made about -- here i think it really is an important point to keep in mind. we're talking about a health care plan in terms of obama care, affordable care act, whatever you want to call it, that's going to provide health care coverage for tens of millions of americans that did not have it previously. you're talking about people who had pre-existing conditions that were not able to get health care coverage before let's not pretend like this notion of deductibles and co-pays and
out-of-pocket expenses is somehow a new phenomenon. that had been the norm of our health care practice. >> i want to tell you this, it's not the notion of deductibles or the notion of premiums. it's not the notion of doctors and hospitals. it's the fact, it's the reality. it's the volume. it's the level. that's what's missing. and you know why it's missing? because whatever government does with their rationing and their controls, they do it wrong. we've learned this for thousands of years. and i can't give you a lecture tonight. chris kofinis, you take this emanuel guy, put him in moth balls, buddy. mike slater, great to see you. and dr. scott gottlieb, as always, terrific stuff. now, we're getting close to a budget deal in washington without a government shutdown. but a very senior republican house source tells me the budget cutting sequester levels don't
have enough republican votes in the house. that's why a deal is going to have to be made. many more details for you on the budget deal next up. speaking of washington, remember, "the kudlow report" is going to be live from the nation's capital tomorrow night. we're going to talk to house majority leader eric cantor about his vision for the gop and we also have a once-in-a-lifetime event. former fed chairman alan greenspan has agreed to a debate face to face with undersecretary of the treasury john taylor. the topic? who is really responsible for the great bubble that eventually burst in 2008? this is the first time mr. greenspan and mr. taylor have agreed to bring their longstanding difference of opinion to a real face-to-face debate. it will be polite but it will be tough. if you have any suggestions for me, i'm the moderator, please tweet. #bubbleblame. that's tomorrow night at our usual time, 7:00 p.m. and 4:00 p.m. eastern.
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welcome back to "the kudlow report." i'm dominic chu with this news alert. the president of ukraine says he is willing to talk to protesters. after another heavy day of protests including the teardown and demolishing of a statue of vladimir lenin, the ukraines want closer ties to europe, more of a free market capitalism. leading the movement is a champion boxer who many see as the possible next president, larry, of the ukraine. >> that is just terrific stuff, dominic chu, thank you very much. really terrific stuff. we'll keep a close eye on this whole revolution. welcome back to "the kudlow report." you've seen a number of reports about the budget deal congress is apparently close to making. i want to give you an update on what i've learned. i had a call from a very senior house republican yesterday who
laid out most of it for me. first off, the sequester itself, the budget-cutting sequester itself, will not continue in its kurntd form. my source says the republican votes were just not there for it, especially the defense hawks. second, the democrats' attempt to extend it to extend jobless benefits will fail. my source says the democrats threw that into the talks way to late to get that deal done. and unemployment is coming down anyway. finally, there is apparently by almost all accounts absolutely no one on either side who wants another government shutdown. i think the markets and the public can feel pretty safe on that one. although you can never be 100% sure. so after a series of down-to-the-wire negotiations, could we see a budget deal this time around? hint, hint, yes. but as i said, the sequester is dead, long live the sequester.
here now, jared bernstein and representative dave swikert. dave r let me begin with you, is my information correct? there is going to be a deal. there is going to be a vote. there are not enough votes to get 218 in the house. the defense hawks and others will not permit the sequester to go through. is that fair? is that correct? >> that's the information i'm hearing. we're all getting on the airplanes tonight and heading back to d.c. to start this actual discussion tomorrow morning. hopefully by midday tomorrow, we'll know what the real facts are and actually where the votes are starting to lay. >> jared, what i also gather is they're going to move some spending accounts around. not going to get into appropriations minutia. that's all going to be shifted
around. but it is interesting, once they get that done and once the defense appropriations goes up some, they're looking at semiinteresting stuff here. higher co-pays for federal pension system, maybe higher fees for the guarantees of that system, maybe fannie and freddie have to pay more. aviation security is going to have a user fee slapped on it. maybe the spectrum rights will be sold. jared, you and i and dave have been around a while. we've heard these things before. is this stuff actually going to get done? >> these are fees that have entered the deal. there certainly is some, quote, revenue there and in some ways it's squirrelly revenue because somebody has to pay that at the end of the day. but it is real and i think what's useful from an economic perspective is that they're talking about buying down about $65 billion of the sequester for
2014 and 2015 and paying for it with those fees much more incremental. that helps reduce fiscal drag on the economy. my information is about the same as yours but with one important difference. the sequester doesn't end in 2015. the sequester is slated to keep going through, i think, 2021. >> yes. >> while this would definitely change the sequester for a couple of years, it does at least in terms of current law come back. >> once you break it, you own it. i was in the grand rudman days. once you break it, you own it. it's interesting, dave, i accept the fact that the defense hawks didn't want the sequester, some budget movement has to occur. whether these user fees go through or not remains to be seen. but it's interesting because my friend jared bernstein and all his colleagues at the congressional budget office told us how bad it would be if we
actually used the sequester and had budget caps, how it would damage the economy, how it would kill 700,000 jobs. and what's interesting, it didn't kill 700,000 jobs. actually jobs are rising. actually i venture to say in true milton friedman free market art laffer economies, i think it's -- >> the data and the predictions that were made two years ago have not come true. where many of us are concerned is there is sort of an inflection and you look at the sequestration dollars in the '14-'15 budget cycle. do you backtrack and say, we'll have the savings in the out years. those out years never materialize. and once again the one mechanism we've had the last couple of years that's actually reduced federal spending starts to slip our grasp. >> i think that's right.
i think once you break it, you own it. and i don't think it's ever going to come back in the same way, at least. we've had a good dose of fiscal restraint. jared, i also hear from my source -- this is important, too. that tax reform is actually still more on the hot front burner than i thought. this source tells me dave camp coming out of ways and means, max baucus coming out of the senate finance committee are still bound and determined to come up with a pro-growth tax reform that would broaden the base and lower the tax rates. i can think of nothing that would help the economy more. what do you think about this? >> nothing in this near-term deal. there is an appetite for what you described particularly on the business side of the equation on corporate taxes. the white house has a plan to do precisely what you described, maybe not get the rate down the way you'd like it but they do have a plan. here's something i'd like to ask
the representative about. i understand that you want to -- that there are republicans up there who want to keep the appropriations levels to where they are already. they're not that interested in this new deal. and i heard you criticizing the sequester in terms of the economic impacts. but my question is, it seems to me -- not trying to play gotcha here. just observing things like how rogers says, we can't write bills to these levels of 967. we have to get rid of the sequester is we're going to be able to actually successfully appropriate. what about that? >> dave, i'm going to give you the last word. all i'll say is hint, hint, i love the word $967 billion. >> they couldn't write bills to that, larry. >> when you say -- let's get one of our mechanics in and this would be a fun conversation.
you can write the legislation to that number. accumulating the votes for it becomes your problem because of all the special interests banging on your door. look, the reality of it is, until this conversation becomes about mandatory spending, the entitlement state, a lot of this discussion almost borders on absurd because of the amount of savings that we get today but also in the out years. what breaks my heart is we continue this fight over the sequestration when the 10,000-pound gorilla, which is, let's be honest, medicare and the other entitlements, that's what consumes us as a people. >> and medicaid. i'll just say this, from my senior source, speculated that the defense hawks and others in the republican house caucus, they would leave 40 to 50 votes short of the 218 necessary to get legislation through.
and it is that exsij genesee that would cause it to get through. we appreciate it. get ready to see and hear what may be the most disturbing yet from team obama on obama care. it all happened on live tv. you're going to have to e soo it for yourself if you're going to believe it. if you have high blood pressure, you might want to take a deep breath right now. good, tall cold glass of water, next up on "the kudlow report." you make a great team. it's been that way since the day you met. but your erectile dysfunction -
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welcome back to "the kudlow report." i'm dominic chu. over the weekend, obama care defender dr. ezekiel emanuel defended obama care. here's his explanation of obama's promise that if you like your doctor you can keep your doctor. >> the doctor never said you could have any choice of any doctor -- >> he asked a question, if you like your doctor, you can keep your doctor. did he not say that? >> he didn't say you can have unlimited choice -- >> didn't he say if you like your doctor, you can keep your doctor? >> yes, but if you want to pay more for an insurance company that covers your doctor. >> if you like your doctor and you're willing to pay more, you can keep your doctor. >> rich people are going to be winners in a system like this. but i want to say, that's not
what obama said. the president never said if you want to pay more, he said, if you like your insurance, you can keep it. if you like your doctor, you can keep him. zeke emanuel should just say, that is correct and the president made a mistake which the president has tried to correct. i worked in government. i worked in the subcabinet for president reagan. reagan made mistakes and he admitted them. >> sure. >> i think one of the reasons obama's polls are crashing and one of the reasons that obama care is crashing is because of this stuff. and i do not think mr. emanuel is a good spokesman at all. i believe they ought to retire him from being a spokesperson on the air. but you've got even more, do you not? >> here's the interesting part. fair enough. let's talk about some other aspect of this whole debate right now. there's one more thing that dr. emanuel said that we want to highlight. take a listen here. >> no one has launched a big p.r. campaign to get these people signed up because of the
problems with the federal website. we are about to launch a big p.r. campaign and that, i think, is going to persuade a lot of people to sign up. >> so a p.r. campaign. here's the question -- do you really believe the argument that a lack of understanding or a lack of knowing what obama care is is leading to the lack of sign-ups that we're seeing? >> i do not, actually. of course, i always believe people are smart, not dumb. and i don't believe in this elitist stuff that you have to lead them by the nose and explain everything to them. what we're learning is the more people understand about how this works, whether it's the insurance in premiums or the increase in deductibles or the narrow networks and the failure to get your doctors and hospitals, or the overall impact on the economy, the more we learn, the less we like. we had the young people here last thursday on the set, republicans and democrats. obama has completely lost his support among that constituency. that was a base core constituency that he is relying
on to finance this whole obama care. they know, p.r. or not, they already know. i think again p.r. is not the problem. >> time will tell for sure. >> no question about it. dominic chu, thanks very much. he will come back later on and talk stock market with me. we have to tell you about another major obama care outrage. despite all that talk from the left about helping people with pre-existing conditions, we have new evidence that it's exactly those kinds of vulnerable folks who may be getting shafted by the new health care law. plus, the truth about skyrocketing deductibles is getting there, too. we have both those stories for you next up. this deductible think, out-of-pocket costs is a killer. so ally bank has a raise your rate cd that won't trap me in a rate. that's correct. cause i'm really nervous about getting trapped. why's that?
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welcome back. the top story this half hour, as more and more people sign up for obama care, sticker shock is really beginning to hit home. this is one of the top stories in "the wall street journal" right now, high deductibles fuel new worries of health-law sticker shock. also very big story in "the new york times" today. now, "the wall street journal" article goes on to say the average deductible for an individual on the bronze plan,
$5,081 for the person. for couples and families, deductibles are more than $10,000. even "the new york times" has focused on this very thing. look at the headline, on health exchanges, premiums may be low, but other costs can be high. my question is, what do low premiums matter if you never meet the sky-high deductible and you've got to pay much more out of cost? a lot of middle class people here can't afford that. let's bring in our great friend, matt miller, back to talk, "washington post" online columnist. and our health expert, betsy mccaughey. matt, let's begin with you. the high cost of deductibility and the out-of-pocket results of that. even if you include the tax credits and the subsidies, when you look at this on average,
there's a 40% increase across the country, according to experts. that's not what we were led to believe? >> yeah. i question the 40% figure. but i'm glad that you would join with me in increasing subsidies where we need them to make sure that out-of-pocket costs for low income folks don't reach more than some certain percentage of income. those would be easy to tweak if we had a spirit of compromise to make this plan work the way it could to extend health coverage to millions of people through the free market exchange system that people like you and the heritage foundation and mitt romney talked about for years. >> by the way, i never endorsed any such thing in massachusetts. betsy, matt says it can all be reconcile. >> no, the high deductibles are part of the lie that was used from the beginning to sell this program. and here's what it will mean to a couple. if you have a deductible of $5,000 or more, do you realize the average cost of giving birth to a child, assuming the
delivery is normal, is $6,050, according to insurance companies. you could go in and have a baby and get nothing back for the first $5,000. couples who are stretched to buy insurance and write that check every month expect when a monumental event like having a baby comes along that their insurance is going to help them out and it's not. >> matt, look, i'm not an expert on every aspect of this, but listen to what betsy is saying, the consequences, a lot of consequences for greater illnesses. delivering a baby is a choice event. but isn't this in part because obama care tried real hard to keep those premiums down as much as possible, but it turns out they couldn't do that either so now they're going after it on the deductible side? isn't it also the case because of these consequences that medicaid is going to explode like top si? >> well, port of the plan, except for the republican governors who decided to deny
their own poor citizens who would be eligible for medicaid health coverage, part of the plan was to expand medicaid for part of the uninsured and subsidize folks who need help to buy from competing private insurers in these new exchanges. so it's amusing to hear so-called conservatives say what we really need to do is spend more to protect low income people or middle class people against unduly high health costs. that's traditionally been the liberal position. i'm glad to see betsy and larry kudlow say, we need to increase the subsidies if need be -- >> that's not what we're saying. >> conservative, liberal, it doesn't matter. the issue is, we need compassion, not compulsion. what we should be doing is helping the people who really need help and leaving everybody else to make their own decisions. >> you're talking out of both sides of your mouth. >> just a minute, matt. with these high deductibles and
the lack of access to specialty hospitals and doctors, the people the president promised to help the most, people with pre-existing conditions are getting clobbered under this law. >> that's just a fraud. that's just a total fraud. >> people who are in the high risk pools in 35 states, hundreds of thousands of them, are losing their health plans at the end of this month or shortly thereafter and they're being pushed into the exchanges where they don't have access to specialty hospitals or any of the top places. if you're having chemotherapy and you're suddenly told you have to lose your oncologist, lose your cancer hospital and go into an exchange plan that's literally just medicaid with some gold foil around it, that's a terrible situation to be in. >> and, matt, let me just throw out -- >> wait, no, larry, i'm sorry, my wife and i learned we were uninsurable a decade ago.
obama care for the first time is letting us join the community -- for the first time you have the ability to get access to health insurance irregardless of your health status. we're unlike every other advanced nation in that regard. for a family like ours and for tens of millions of people who are uninsurable, that anxiety goes away for the first time. >> it doesn't go away. all over the country, there are stories about people who were in the pre-existing plans in these 35 states and are losing that adequate coverage. >> those are terrible plans. >> i have looked into it. >> betsy, answer the question -- >> matt, i don't understand, to
me, you're talking about 2 million people roughly. >> no, you're not. you're talking about tens of millions of people -- >> 2 million in the individual market, matt. that's the number. >> by the way, the employer base may be put into medicaid also but we don't have time to go there. all i'm saying is the creation of risk pools whether it's federal or federal and state, which is what i would prefer, would be a transparent way of showing taxpayers exactly what we are doing with taxpayer money and it would be compassionate. i've never understood -- expand it, matt. and give them more choices. earlier in the show -- i want to correct you on one thing. earlier on this show, we talked about the federal employee health care plan which has thousands of options in it. if you're talking to me about free markets and free economics, which is what i believe in, to me, what's missing here, whether
it's the risk pool for those who are sick -- cobra or just ordinary people who want an insurance plan, what's missing here is competition, real competition. i don't mean four or five plans that are virtually the same and the only difference is financing. i'm talking about real consumer-driven competition, matt miller, that will bring down costs and will allow people to get what they need, not what they're forced to swallow. >> yes. how about freedom, larry. freedom. >> it is a freedom issue. i'm sorry we don't have more time. >> the freedom to go bankrupt from serious illness. >> the freedom to make your own choices instead of the government. >> i think it's -- i think a good risk pool -- i'll tell you what, matt. in the spirit of compassionate
conservatism, i would give it to them. how's that? i would give it to them as long as the voters acknowledged it and as long as it's transparently placed on the budget, i would stop kidding ourselves and i would just give it to them. >> we've tried it for decades. it hasn't word. >> i have to get out of here, matt miller, thank you very much. betsy mccaughey, thank you very much. how did stocks do after that big rally on friday? we'll talk about your money next up on "the kudlow report." avo: the volkswagen "sign then drive sales event is back. which means it's never been easier to get a new passat, awarded j.d. power's most appealing midsize car, two years in a row. and right now you can drive one home for practically just your signature.
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another record day on wall street as the s&p 500 notches a fresh all-time high. as markets prepare to wrap up a gangbuster 2013, what's ahead for markets come 2014? will it continue or will stocks go into a taper tantrum, very cute. we welcome peter costa. dominic, you want to get in here. >> i want to get in here because the markets have been on an amazing tear. arguably since 2009. but the last couple of days have been even more interesting because what it does do is tell
you that maybe fundamentals are again mattering to the marketplace. the reason why i say this is because over the past few years, if you've just come out of college, you're in this environment where you think that interest rates move in the opposite direction of stocks. >> right. >> because that's what it's been for the past few years, when normally speaking, they move together. >> absolutely. >> now, on friday, blockbuster jobs number, the economy is getting better, rates tick higher, going back towards 3% on the ten-year, the longer side of things, the ten-year treasury. and stocks still go up. so all of a sudden, maybe rationally -- >> i watched that happen a lot in the '80s and '90s. peter, a couple of things. today we got the flow of funds from the federal reserve. this is household net worth, stocks, bonds, equity, real estate, whatever you want. we hit a new all-time high on wealth, wealth of america. $1.9 trillion increase in the
third quarter. we are now well beyond the peak which occurred in the second quarter of 2007. so wealth of america has now made a new peak. and i just want to add to that. in the gdp report we had last week, profits hit a new all-time high of $2.1 trillion, about 11% of gdp, another all-time high. and a year-on-year increase of 8% to 9%. are those not the fundamentals that dominic is talking about? they're pretty solid fundamentals. >> those are great fundamentals. and if you really look at it, historically that's the way people should invest. when there's more money, there's more disposal income, when there's more money to be put into the market, they're going to invest in the market. what we've seen with the end of the tapering is we've seen a lot of people -- the markets have reacted negatively to good news, which is ridiculous. the bottom line is the economy is doing better, everyone's going to do better and the market's going to do better.
once the tapering gets off -- once we get that out of the way, which we probably will by the end of the march, not talking about it as much, i think the economy has a lot more -- >> i think it will be cool if all the bond-buying was done by the end of march. today, jim bullard, head of the st. louis fed, jeff urlacher from the richmond fed, and richard fisher from the dallas fed, all three of those guys said, it's time to slow down the bond purchases, all three of them. didn't have any catastrophic effect on the market. >> not one bit. i think it's already priced into the markets. so it's time to get moving. it's time -- we have an economy that's starting to expand again, as you can see by the gdp numbers. the unemployment numbers are starting to go down and starting to get closer to the level that the fed wants. i think it's time. it's time to stop supporting the market by flooding the market. i think there's plenty of money in the market. i think there's plenty of money in the economy. banks have money. everyone has -- the most
important thing for banks is to start lending more and be a little freer with their capital reserves. once that happens, small businesses will benefit. the trickle-down effect -- >> when is that going to happen? >> i would love to see it happen in the first quarter. >> we've had upturns in lending but they've been followed by lackluster flattening out -- we're in a flat period for commercial and industrial loans. i want to see main street lending, development lending and i want to see businesses investing in long-term projects. that will take the jobs from 200,000 a job month to 300,000 month. >> there's a couple of reasons why that's going to happen in the first quarter. i think once -- i know how you feel about the federal government and how -- the sequester and not having a budget deal. i understand how important it is. if they do come up with a budget deal, a lot of companies can look at their taxes and say, i know what my course is going to be for 2014. >> i have money. >> i can start spending.
>> i hope you're right. dominic chu, peter costa, stay where you are. we're going to talk about our big financial news program tomorrow with alan greenspan and john taylor, two brilliant monetary thinkers, i mean that sincerely. they've had a longstanding dispute about whether money was too loose for too long in the 2000s and whether that created a bubble. and i'm going to be an honest moderator of that debate. i know they both want that. i want you to tweet u us, #bubbleblame. stay with us. i'm kudlow. we'll be right back to talk about this. and ah, so you can see like right here i can just... you know, check my policy here, add a car, ah speak to customer service, check on a claim...you know, all with the ah, tap of my geico app. oh, that's so cool. well, i would disagree with you but, ah, that would make me a liar. no dude, you're on the jumbotron! whoa.
we're very excited for a special edition of "the kudlow report" tomorrow night. i'm going to be heading down to washington, d.c. i'm going to moderate a debate between former fed chairman alan greenspan and former undersecretary of the treasury john taylor. and the question, who's to blame for the bubble that caused the crash? by the way, i'm going to be an even-handed, fair moderator. peter costa, we don't have much time, quick thought on this debate. >> on the debate, i think that a lot of people want to blame wall street. there's a lot of blame to be shared. i think that we had an increase in savings, which forced rates down. there was a lot of money that had to be lent. it created more money to flow into the system, flow into the market -- >> you don't think greenspan kept rates too low for too long?
>> that's part of it. but it's not everything that professor taylor is saying. a lot of people were borrowing that shouldn't have been. >> i've known alan since the mid-'70s. he's a smart guy. that's it for tonight's show. tomorrow night, down to washington, greenspan versus taylor and house majority leader eric cantor. i'm kudlow. please join us. the american dream is of a better future, a confident retirement. those dreams, there's just no way we're going to let them die.
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>> narrator: in this episode of "american greed"... he makes millions by hooking customers wanting a better sex life. >> the "smiling bob" campaign has to go down as one of the more memorable of a generation. >> narrator: taking advantage of their sexual insecurities, steven warshak makes illegal charges on the credit cards of thousands of customers. >> i was upset, and i was angry that they did this to her, put her in this situation. >> narrator: and later, an investment manager takes on the toughest clients -- retired nfl players -- and steals their money. $150 million vanishes before the